Over in the ICON community forum, ICON project manager TJ Hunt has posted his thoughts on the role of the Contribution Proposal System (CPS) and its role in the ICON ecosystem over the long-term.
In particular, he offers a proposal regarding CPS tokenomics he thinks will allow CPS to better promote the long-term stability of the ICON network.
On Twitter, TJ was kind enough to provide a TLDR précis:
“I don’t believe that we should AUTOMATICALLY burn any excess inflows to the CPS Treasury.
Rather, by removing a max cap to the ICX CPS Treasury we would be introducing “Optionality” to the CPS platform. We would either have the option to burn or the option to invest.
Not limiting the options we have will bring greater value to the network imo.
I believe we should be using these excess funds to continue focusing on the long-term growth of our $ICX ecosystem rather deflation.”
Money quote from the original post:
“I believe for ICON to be successful and sustainable over the long-term we need to accumulate funding in the CPS rather than automatically burning excess ICX inflows. Accumulation of funding in the CPS introduces “optionality” to the platform. By keeping funds in the CPS we now have “the option to burn or the option to invest”. Optionality has a tangible financial benefit, and objectively speaking having more optionality is more valuable than less optionality. Plus, this gives the platform more flexibility whereas burning limits our funding options.”
On Twitter, TJ notes this is merely a conversation starter with the community, NOT a final decision.
TJ’s forum post also includes a helpful explanation of how CPS tokenomics will work after IISS 3.1 and BTP.
In particular, the CPS Treasury will have three different inflows: ICON Foundation node rewards, 10% ICON 2.0 inflation and BTP Fees.